Yes, it will take out scratches given it didn't go into your base coat. That is pretty much one of the main reasons for wetsanding
Be warned though, I wetsanded a car that was keyed all the way down the driver's side one time, just the scratches. When I was finished, the area looked great... it actually made the rest of the car look worse. The trick is to try to not cut into the clear any more than you have to or to do the entire car. The human eye is trained to look for imperections in paint jobs. As long as the orange peel is equal, no one will notice. It's mind blowing to me that the majority of new cars have a good bit of orange peel... ranging from Civic's to Corvette's.